Which costs can I claim against tax as a landlord?
Landlords can claim many costs, such as management, maintenance, certain financing costs and depreciation of the building. That reduces the taxable surplus.
As a landlord you can claim numerous expenses against tax. They reduce the surplus from letting and with it your tax burden. What matters is that the costs relate to the letting and are properly evidenced.
Typical deductible costs
Management and running costs
Costs for the ongoing management of your property, as well as many operating and running costs, are generally deductible. Orderly management provides you with the appropriate evidence.
Maintenance and repairs
Expenditure on upkeep and repairs can be taken into account. Depending on the kind of work, tax law distinguishes whether the cost is claimed immediately or spread over time. This distinction should be checked case by case.
Financing
Interest on a loan taken out for the let property usually counts among the deductible costs. Repayment of the capital is to be distinguished from that.
Depreciation
Part of the building costs is written off over its useful life. That is a lasting item which reduces the taxable surplus every year.
Anyone who records all permitted costs cleanly pays in the end only on what is genuinely income.
How to keep track
Keep separate records for each let property and enter receipts as soon as possible. Separate upkeep from improvement, because tax law treats the two differently. Note which payments belong to financing and which are pure repayment. This order saves time at the year end and prevents deductible items from being lost. As managers we take on exactly this structured recording for you and provide a traceable annual statement that your tax adviser can use directly. That way you use every permitted deduction without having to keep track yourself.
What to watch for
Collect receipts continuously, not only at the year end. Separate private expenditure clearly from expenditure relating to the letting. The precise allocation, and the question of what is deductible immediately or over time, should be settled with your tax adviser. How the surplus arises at all is explained in How is rental income taxed?. As managers we provide structured statements so that no deductible item is missed. Arrange a conversation and we will show you how we take the load off your letting.